Understanding the Difference Between Material, Equipment, and Asset in SAP

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Learn the key differences between Material, Equipment, and Asset in SAP with clear examples and use cases. Understand how each is used in procurement, maintenance, and financial accounting.

In SAP (Systems, Applications, and Products in Data Processing), the terms Material, Equipment, and Asset represent different types of business objects, each with distinct uses and characteristics. Here’s a clear comparison:

Term	Definition	Usage	Key SAP Module
Material	A general item used in procurement, production, inventory, or sales. It can be raw material, finished goods, etc.	Inventory management, sales, procurement, production.	MM (Materials Management), SD (Sales and Distribution), PP (Production Planning)
Equipment	A physical, individual item that is maintained as a unique object (with a serial number) for tracking service and maintenance.	Maintenance, calibration, tracking the usage history of machines/devices.	PM (Plant Maintenance), CS (Customer Service)
Asset	A fixed asset like a building, machine, or vehicle that is capitalized and depreciated over time.	Financial accounting, asset tracking, depreciation.	FI-AA (Financial Accounting - Asset Accounting)

Key Differences

Feature	Material	Equipment	Asset
Has inventory stock?	Yes	No	No
Can be purchased/sold?	Yes	Sometimes (if it’s spare part or product)	Rarely
Individually tracked?	Only if serialized	Yes	Yes
Depreciated over time?	No	No (unless also an asset)	Yes
Can be maintained (serviced)?	No	Yes	No (unless also linked to equipment)

Example Scenario

Material: A laptop model (e.g., “Lenovo ThinkPad T14”) in stock.
Equipment: A specific laptop with serial number “SN12345” used by an employee and tracked for maintenance.
Asset: The same laptop recorded as an asset in accounting books, being depreciated over 3 years.

Key points:

Sometimes, a material can become both an equipment (if serialized) and an asset (if capitalized), depending on how it’s used in the organization.
While all consumables are materials, not all materials are consumables — some are stock items, production components, or finished goods.